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Taiwan shares rebound, led by high-tech heavyweights

2017/09/21 16:45:07

Taipei, Sept. 21 (CNA) Shares in Taiwan bounced back Thursday from losses seen in the previous few sessions as investors were encouraged by another record high on Wall Street overnight, dealers said.

The bellwether electronics sector lent support to the weighted index, with Hon Hai Precision Industry Co. (鴻海), an assembler of iPhones and iPads for Apple Inc., staging a significant rebound on bargain hunting, while buying also spread to the notebook computer segment to push the broader market higher, the dealers said.

The weighted index on the Taiwan Stock Exchange closed up 59.27 points, or 0.56 percent, at 10,578.44, after moving between 10,493.95 and 10,603.08, on turnover of NT$119.56 billion (US$3.96 billion).

The market opened down 0.12 percent and moved to the day's low on follow-through selling from a session earlier, but with the weighted index falling below the 10,500-point mark, bargain hunters became active in picking up large-cap stocks such as Hon Hai, memory chip supplier Nanya Technology Corp. (南亞科) and contract notebook computer maker Compal Electronics Inc. (仁寶), the dealers said.

The buying interest vaulted the weighted index back into positive territory and returned it to the 10,500-point level as investors were motivated to shift to the buy side by the gains posted on Wall Street, where the Dow Jones Industrial Average and the S&P 500 index hit a fresh high after a policymaking meeting concluded by the Federal Reserve, they said.

"The Fed's decision to leave its key interest rates unchanged and to unwind its bond holdings starting from October, was in line with market expectations," Mega International Investment Services Corp. analyst Alex Huang said.

"In the meantime, the bank appeared a little bit hawkish with it's hint of a possible rate hike later in the year, but the markets at home and abroad still reacted to the meeting outcome positively," Huang said.

He went on that the rebound staged by the local main board Thursday was technical in nature after the weighted index lost 1.06 percent in the previous two sessions, when investors sold down large- cap high-tech stocks.

"Today they returned to hunt bargains in the bellwether electronics sector," Huang said. "Hon Hai, which had been battered in recent sessions, was one of largest beneficiaries, serving as one of the drivers to boost the broader market," he added.

Hon Hai, the world's largest contract electronics maker, gained 4.13 percent to close at NT$111.00, off an early low of NT$105.00, with 101.48 million shares changing hands, after the stock shed more than 9 percent in recent sessions.

"The stock's earlier heavy losses made it attractive to many investors who shrugged off negative leads about its failed bid to buy chip assets from Toshiba Corp.," Huang said.

Toshiba announced a day earlier that it had agreed to sell its prized memory business -- Toshiba Memory -- to a consortium led by Bain Capital Private Equity for 2 trillion Japanese yen (US$18 billion) instead of the group led by Hon Hai, which had been an aggressive contender for the assets.

Also in the electronics sector, Nanya Technology rose 6.74 percent to close at NT$85.60 after the DRAM maker said that it posted about NT$7.7 billion in profit after a disposal of part of its stake in U.S. counterpart Micron Technology Inc.

Contract notebook computer maker Compal gained 3.24 percent to end at NT$22.30, and rival Quanta Computer Inc. (廣達) added 1.95 percent to close at NT$73.10.

Bucking the upturn on the broader market, contract chip maker Taiwan Semiconductor Manufacturing Co. (台積電) fell 0.23 percent to close at NT$221.00.

In the non-high-tech sector, Eclat Textile Co. (儒鴻) rose 5.17 percent to end at NT$376.50, while food brand Uni-President Enterprises Corp. (統一) fell 0.77 percent to end at NT$64.80.

"The main board still faces stiff technical resistance ahead of 10,650 points, so today's gains are unlikely to help the weighted index climb out of consolidation mode," Huang said

(By Frances Huang)
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